The New System of Commercial Law

To say that the basic concepts and institutions of modern Western commercial law were formed in the period of the late eleventh and twelfth centuries does not ignore the debt which the creators of those concepts and institutions owed to the Roman law as it was reflected in the newly discovered texts of Justinian.

The old Roman jurists had also recognized that many contracts were governed not by the civil law but by customary law, including the jus gentiurn. Indeed, it was the jus gentium, the (customary) "law of nations," applicable to those who were not Roman citizens, that governed most types of commercial transactions within the Roman Empire, especially those involving carriage of goods over long distances.

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Included in the customary law of commerce of the Roman Empire was the Sea Law of Rhodes, usually thought to date from about 300 B.C., as well as the customs of maritime trade that had been developed subsequently by eastern Mediterranean traders. Some of the rules of the Roman customary law of commerce, as well as some of the rules of Roman civil law, had survived in the West from the fifth to the eleventh centuries, independently of the texts of Justinian; they are to be found, for example, in Lombard law as well as in customs of the merchants of Venice, which remained as a flourishing trading center throughout the period.

Nevertheless, neither the newly rediscovered Roman civil law nor the barely surviving Roman customary law, including the jus gentium, was adequate to meet the kinds of domestic and international commercial problems that arose in western Europe in the late eleventh and twelfth centuries.

It is conceivable that the learned Romanists in the European universities of the late eleventh, twelfth, and thirteenth centuries could have created a new body of mercantile law out of the Roman texts, just as they created a new body of civil law out of those texts. It is also conceivable that the canon lawyers at the same universities, together with their colleagues in the papal and episcopal chanceries, could have done the same, especially in view of the fact that ecclesiastical corporations engaged heavily in commercial activities. It is characteristic of the time, however, that the initial development of mercantile law was left largely, though not entirely, to the merchants themselves, who organized international fairs and markets, formed mercantile courts, and established mercantile offices in the new urban communities that were springing up throughout western Europe.

Occasionally, rules of mercantile law developed by merchants were collected and circulated. One of the earliest examples was a collection of maritime laws adopted about the time of the First Crusade ( 1095) by the Republic of Amalfi on the Italian coast of the Tyrrhenian Sea; known as the Amalfitan Table, its authority came to be acknowledged by all the city republics of Italy. About 1150 a compilation of maritime judgments by the court of Oleron, an island off the French Atlantic coast, was adopted by the seaport towns of the Atlantic Ocean and the North Sea, including those of England. The Laws of Wisby, a port on the island of Gotland in the Baltic Sea, were adopted about 1350; they were similar to and possibly derived from the Laws (or Rolls) of Oleron, and they gained wide authority in surrounding Baltic countries.

340- to be accepted as governing law in the commercial centers of the Mediterranean. All these collections dealt exclusively with maritime law, including contracts of carriage of goods by sea.

At the same time a large body of law was created that governed overland trade. Markets and fairs had existed since the seventh or eighth century, but on a relatively small scale and without a highly developed legal character. From the eleventh and twelfth centuries on, however, great international fairs were held regularly in scores of cities and towns throughout Europe. International markets were also common, especially in seaport towns, These fairs and markets were complex organizations, and with the growth of legal systems, both ecclesiastical and secular, there developed the concept of a special law merchant, which included not only the customary law of fairs and markets but also maritime customs relating to trade and, finally, the commercial laws of the cities and towns themselves. The Italian cities took the lead in collecting systematically and enacting the customary rules by which commercial activity was governed.

The law merchant, then, governed a special class of people (merchants) in special places (fairs, markets, and seaports); and it also governed mercantile relations in cities and towns. It was distinct from ecclesiastical, feudal, manorial, urban, and royal law, although it had especially close connections with urban law and ecclesiastical law.

The law merchant shared with the other major legal systems of the time the qualities of objectivity, universality, reciprocity, participatory adjudication, integration, and growth. These six qualities not only show its close links with the Western legal tradition as a whole but also provide an index to its own specific characteristics.